Learjet 85 pause has spillover effect on Héroux-Devtek
Jan. 28, 2015, Longueuil, Que. - Aerospace supplier Héroux-Devtek Inc. is feeling the impact of Bombardier Inc.’s indefinite halt of its Learjet 85 business-jet program.
January 28, 2015 By The Globe and Mail
Longueuil, Que.-based Héroux-Devtek said on Tuesday it will book a third-quarter non-cash charge of $7.9-million before taxes as a result of the “pause” in the Learjet 85 program announced Jan. 15.
The charge is for the impairment of capitalized development costs on the business jet, Héroux-Devtek said in a news release.
Héroux-Devtek is the developer and supplier of the complete landing-gear system for the aircraft.
Bombardier said it is putting the Learjet 85 on ice because of “continued weakness of the Light aircraft category since the economic downturn.”
It will record a pretax, fourth-quarter special charge of about $1.4-billion (U.S.) and cut about 1,000 jobs at its sites in Querétaro, Mexico and Wichita, Kan.
Héroux-Devtek said the $7.9-million charge is equivalent to $5.8-million or 16 cents per share after taxes.
Bombardier has been in cost-cutting mode as it comes under financial pressure because of cost overruns and delays in its C Series commercial aircraft program.
It said it has decided to focus on the development of the C Series and the Global 7,000/8,000 business jets.
The Learjet 85 was initially to enter service in late 2013 but that was delayed as Bombardier experienced teething problems developing the all-new, technologically innovative plane.
Héroux-Devtek is principally a manufacturer of landing gear after it sold its aerostructure and industrial products divisions in 2012.